What Intel's Nehalem Servers Mean To SMBs

It might seem easy to dismiss Intel's new Xeon 5500 Series processors (code-named Nahelem) as expensive toys for high-performance computing and large enterprises. But despite the launch's concentration on big companies, the new chips also promise to deliver faster, more energy-efficient options at small-business-friendly prices.

It might seem easy to dismiss Intel's new Xeon 5500 Series processors (code-named Nahelem) as expensive toys for high-performance computing and large enterprises. But despite the launch's concentration on big companies, the new chips also promise to deliver faster, more energy-efficient options at small-business-friendly prices.Ladling out an alphabet soup of acronyms and performance figures, Patrick Gelsinger, senior vice president and general manager of Intel's Digital Enterprise Group, talked up a wide array of superlatives for the new chips at the launch event yesterday. But for small and midsize businesses, the story is fairly simple: Significantly faster performance and less power consumption.

Large enterprises have been testing the chip for months in seed programs, and now small and midsize companies will get their chance. It seems clear that companies looking for new servers can't afford to ignore the Xeon 5500 Series. The only real question is whether the benefits are big enough to entice SMBs into refreshing their servers sooner rather than later. Given current economic conditions, that might be a lot ask.

But because power and management costs have become the dominant parts of a server's Total Cost of Ownership (TCO), Intel can lay out some compelling scenarios for Xeon 5500 Series servers. The chip is optimized for virtualization, with the goal of bringing "native" performance to virtualized applications and making it possible to virtualize apps that can't be virtualizaed today. By virtualizing multiple servers into one, according to Intel and the server manufacturers, companies can get equivalent peformance while cutting energy costs up to 90%, for payback of the initial investment in 8 months. Or, with one-to-one server replacement, you can get a 9 times performance boost and still save 18% on your energy costs.

It may take some SMBs a few months to understand those benefits, said Bob Galush, Vice President System x High Volume Servers and Options in IBM's System and Technology Group, since they haven't been testing the chip yet. "They're going to want to get comfortable and see the promised performance benefits for themselves before tossing out their existing servers." But companies in high-power-cost areas, and those who are already at the edge of their server performance needs, are likely to replace servers right away, Galush added. "And some companies, where computing power is critical, will see it as a competitive advantage."

Interestingly, SMBs may be able to get those benefits no matter which Xeon 5500 server they buy. Some 70 vendors are offering 230 Xeon Series 5500 server designs, including Dell, Hewlett Packard, Sun, Cisco, and IBM, all of whom were represented at the launch. Despite frantic positioning by the various vendors, there may not be that much difference between the various offerings, because they all claim clever engineering improvements leading to dramatic improvements over earlier-generation servers. InformationWeek's Antone Gonsalves quotes Andi Mann, analyst for Enterprise Management Associates: "We're getting down to literally microseconds of difference in terms of performance and power."

And many of the companies offer servers that start at less than $1,000 -- aimed squarely at SMBs. The new chip enables server "benefits you really can't refute," said IBM's Galush. His company has "historically been seen as more large enterprise" oriented, Galush said, but "we're trying to do more in small business."

Even Sun is looking to SMBs as a market for its servers. "It's not the classic Sun strategy" of going after larger enterprises, said Dimitrios Dovas, director of systems marketing.

Even more profound changes may come later, as Intel's Gelsinger predicted that the Xeon Series 5500's low heat output would lead to new, innovative server form factors within the next year or two. Perhaps the much discussed concept of the "data center to go."

To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.

IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.

Join us for a roundup of the top stories on InformationWeek.com for the week of November 6, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."